It’s been observed that equity markets have been pretty chill about the whole debt ceiling/default thing.
But there are some signs of weakness creeping in.
From Dan Greenhaus (@danBTIG) of BTIG, here’s some signs of weakness creeping in, from his note to clients last night:
The (modest) losses keep mounting. The S&P is now down in 10 of its last thirteen sessions (-2.9%) while the Russell 2000 is off its high from last Tuesday by just 2.0%. Discretionary badly underperformed today as the six of the worst seven names in the entire S&P (URBN, MAT, ANF, TRIP, GCI and BBY) come from this corner of the market. Defensives had a strong showing as telecom finished in the green and utilities and staples held in there thanks to FE/ED and KRFT/tobacco names respectively. There was little incremental Washington news today (though the Republican disapproval rating did hit 70% and some defence companies, which fell 3-5% last week, reacted positively to news that workers would be recalled) although poor Asian equity performance (which we alluded to last evening) set the day’s tone.
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